No Down Payment? No Problem!

Michelle Luxton
Loan Officer
NMLS #363495
Mann Mortgage, LLC

As our Nation sees economic improvement across the board, the housing market has seen a brightening outlook on increasing home affordability for those currently in homes and those looking to purchase homes. Together with low interest rates and lower home prices, mortgage payments nationally are 18% less expensive today as compared to one year ago.

For home buyers here in Hawaii though, making the mortgage payments every month may not be the main concern. With our high property prices statewide (the median sales price in Honolulu for a single family home was $640,000 in March), being able to save enough money for the traditional 20% down payment can seem a daunting task. Thankfully, a bevy of low and no-down payment mortgages are resurfacing in the market place to ease that concern.

Until recently, many borrowers had to go through a government guaranteed program such as the Federal Housing Administration (FHA) or the Department of Veteran Affairs (VA) to get a mortgage with less than 10% down. Now, loans with down payments between 3% and 10% accounted for almost a fifth of the conventional loan offers lenders made in the first quarter. So what are the details you ask? Let us explain. Here at Mann Mortgage, our low down payment products provide home buyers the ability to afford their dream home with little to no money out of pocket. Our low or no down payment programs range from down payments of 0% to 5% without special qualifications.

For those looking to put no money down, the United States Department of Agriculture loan (USDA) is a great product to take advantage of. The USDA loan offers 0% down payment coupled with the lowest monthly mortgage insurance and some of the lowest interest rates on the market. A limiting factor of the program, however, is that it is only available in certain geographical areas zoned as Rural. The areas in Hawaii currently approved for USDA financing are constantly changing and are set to be re-zoned once again in September of 2013.

For those not able to utilize USDA financing, conventional financing with 3% or 5% down has been rampantly popular. With 3% down you are able to purchase a home in any area of Hawaii while still taking advantage of low interest rates and low monthly payments for mortgage insurance. With a 5% down payment, you still have the flexibility of purchasing statewide, yet you would not have any additional payments for monthly mortgage insurance.

The Veterans Affairs Loan (VA) is still a great option for those home buyers who are eligible. Generally, active duty and honorably discharged service personnel are eligible as well as those individuals who have spent at least 6 years in the reserves or National Guard, or are spouses of service members killed in the line of duty. The VA loan is insured by the US Department of Veteran Affairs, requires 0% down payment, and has no monthly mortgage insurance associated with it. And because we live in a high cost state, the VA loan is available up to $750,000 with 0% down and up to $1.5 million with a minimal down payment.

There is a vast variety of loan products available on the market and not every product is right for you. It is important to work with a knowledgeable, experienced loan officer whose company is able to offer all the programs for you to choose from. It is important to speak with a loan officer as early in your home buying process as possible so you can have a strong, competitive offer ready when you find the home you’ve been looking for. This greatly increases your chances of having your offer accepted and makes your offer stand out in a crowd.

At Mann Mortgage we continue to serve our community and clients with a wide range of mortgage products including all the programs I’ve mentioned and more. We strive to provide outstanding customer service while protecting the best interests of our clients. If you have any questions about the home buying process or would like a free consultation to see how much you can qualify for, please feel free to contact me. You can reach me at 808-228-8850, or stop by the Honolulu Mann Mortgage Office at Century Square, 1188 Bishop Street 36th floor, #PH2.

Locations Hawaii
Michael Marks
Sandwich Isles Realty
Kimo Smigielski, Broker-in-Charge
R, ABR, CRS, GRI, e-PRO
Hawaii Life Real Estate Brokers
Emily Garcia
Agent, REALTOR(A), RS-77391
Coldwell Banker
DAY-LUM Properties

Edith Crabb, RB-8195
Coldwell Banker
DAY-LUM Properties

Glenn Takase, RB-18547
Coldwell Banker
DAY-LUM Properties

Misti R. Tyrin, RS-75836
Coldwell Banker
DAY-LUM Properties

David L. Skeele, RB-12882
Kauai Landmark Realty
Phil Fudge, RB-18576
Claire Keaton, RS-73854
Coldwell Banker
DAY-LUM Properties

Shea Miyashiro, RS-64678
Coldwell Banker
DAY-LUM Properties

Atsuko Winston, RS-75899
Coldwell Banker
DAY-LUM Properties

Mark Skeele, RS-77005